This article first appeared at National Review.
Ron Swanson is having a good year.
The smug anti-social meat-and-potatoes libertarian protagonist in the NBC series Parks and Recreation prides himself on being a do-nothing saboteur in his Pawnee (a fictional town in Indiana) municipal job and also, among other things, on having stashed away untold amounts of gold bullion, buried in various locations for doomsday or perhaps just for a rainy day.
While his sophisticated counterparts in Indianapolis or (gasp) far away New York City fret over their carefully constructed portfolios of securities, mutual funds, hedge funds, and the rest, Swanson’s own investment shines, like him, in its straight, plain and idle simplicity. This year, it also shines from having outperformed most assets, with the price of gold logging a 29 percent rise since January compared with a humble 1 percent for the S&P 500 stock index and 20 percent for a Nasdaq that is driven by only a handful of names.
After a long decline in the 1980s and 1990s, gold began its rehabilitation on the eve of the new millennium. Had Swanson caught the gold bug in July 1999, when gold made a historic bottom at $252.8, he would have gained 677 percent from his investment, a performance that towers over the major stock indices.
Entire careers have been made in the stock market over that twenty-one year span, with billions of dollars flowing into the pockets of bankers and investment managers, and into their six-figure cars, seven-figure Hampton homes, and eight-figure private jets.
Yet, none of these financiers’ portfolios has measured up to gold. The dumb barbaric yellow relic has trounced all of them over nearly every interval since 1999, as can be seen in the table above. The one exception to this public thrashing is the ten-year period since 2010 in which gold has underperformed only because it spiked in 2010-11, much as it is currently. Read more